Yancoal Australia Ltd. · ASX:YAL
Yancoal Australia — H1 2019 Earnings Presentation
21 slides from Yancoal Australia's earnings presentation, Aug 21, 2019
Slide 1: Yancoal Australia Ltd 2019 Interim Result
Yancoal Australia Ltd 2019 Interim Result Australia’s Largest Pure-play Coal Producer 21 August 2019
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Acceptance This presentation is issued by Yancoal Australia Limited ABN 82 111 859 119 (Yancoal). By accepting, accessing or reviewing this presentation, you acknowledge and agree to the terms set out in this Important Notice and Disclaimer. Summary of information Thi
Slide 3: Important Notice and Disclaimer (Continued)
Important Notice and Disclaimer (Continued) Reserves and Resources Reporting In this presentation, references to mineral resources (Resources) and ore reserves (Reserves) for Yancoal are compliant with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 201
Slide 4: 1H 2019 Key Highlights
1H 2019 Key Highlights US$500mn debt pre-payment Sustained improvement in safety completed in 1H19, performance Leverage reduced to 1.4x Gearing reduced to 32.5%(2) 17.8Mt Attributable Saleable Interim dividend of A$136.7MM, or Production(1) A$0.1035/share (3) Continued progress towards A$62/tonne O
Slide 5: Our Proposition to Drive Shareholder Returns
Our Proposition to Drive Shareholder Returns World class large-scale coal mines which produce high value export coal and operate at industry-leading cash margins Platform for growth underpinned by significant base of reserves / resources and a long-term sustainable capital structure Experience
Slide 6: Safety Performance
Safety Performance Commitment to operating mines to the highest safety standards. Core Hazard Critical Control development and implementation continued throughout 1H19. TRIFR – Yancoal (2) TRIFR – Watagan (3) Rolling 12 Month Basis Rolling 12 Month Basis 12 40 35 10 30 8 7.29 25 6 20 17.09 15 4 10 2
Slide 7: Coal Production
Coal Production Portfolio transformation drove considerable production expansion in 2018, and incremental production gains have continued into 2019 Annual Saleable Production by Asset (100% Basis) (1) (2) (Million tonnes) • 34.4Mt Run-of-mine (ROM) production, up 5% from 1H18. Moolarben MTW HVO Yarr
Slide 8: Sales Volumes and Unit Costs
Sales Volumes and Unit Costs Production costs have been stable despite industry cost inflation Cash Operating costs (per tonne of saleable production) (A$/tonne) • A$124/tonne average realised price for 1H19. Cash operating (excluding royalties) Operating Margin • Lower global US$ coal prices partia
Slide 9: Operating cashflow
Operating cashflow Production volumes, unit cost and coal prices drive the operating cashflow profile Annual Operating Cashflow (A$ Million) 3,000 • The operating cashflow turnaround through 2018 is a reflection of the asset scale and quality. 2,500 • The higher sales volumes (16.5Mt), and the met c
Slide 10: Robust Operating EBITDA
Robust Operating EBITDA EBITDA and margin rebased with the expanded asset base Annual Operating EBITDA and EBITDA Margin (1) (A$ Million) | (%) • EBITDA 4% lower versus 1H 2018 largely due to flat revenue Operating EBITDA EBITDA Margin and increased costs associated with increased production. 3,000
Slide 11: Positive Profit Trend
Positive Profit Trend Two-year turnaround in profitability has been consolidated Annual Pre and Post Tax Profit Results (A$ Million) • Profit has increased sharply over the past two years. Profit before tax Profit after tax 1,172 • Profit before tax for the period mirrors the EBITDA profile. 1,200 •
Slide 12: Continued Debt Reduction and Deleveraging
Continued Debt Reduction and Deleveraging Balance sheet materially strengthened and well-poised to deliver future growth and shareholder returns Annual Net Debt(1) and Leverage Ratio(2) (A$ Million) | (x) • A US$500 million early debt repayment was made in 1H19. Net debt Leverage (net debt/EBITDA) T
Slide 13: Evolving Coal Market Conditions
Evolving Coal Market Conditions Market conditions are driving the index movements and relative price dynamic Regional coal indices USD/tonne 130 • Thermal coal prices under pressure through 1H19. 120 GC Newc (6000 kCal/kg NAR) API5 (5500 kCal/kg NAR) 110 • Premium for higher-energy thermal coal has
Slide 14: Regional customer base
Regional customer base Yancoal has delivers to customers throughout the region Revenue from external customers (1) A$ Million • ~72% of revenue in 1H19 was from Japan, Singapore, China, South Korea and Taiwan. • Our thermal coal is generally priced on 1H 2019 an index price, an annual fixed price or
Slide 15: Demand for High Quality Coal Expected to Remain
Demand for High Quality Coal Expected to Remain Regulatory landscape means power generators are increasingly focused on securing coal with a high energy content Power generators are focused on improving thermal efficiency …which should drive demand for high quality Australian product(1) Note: bubble
Slide 16: Well-positioned for Continued Growth
Well-positioned for Continued Growth Our large-scale and long-life asset base contains several organic growth initiatives which have the potential to deliver material value for shareholders Large-scale and long-life asset base… …with growth projects that could drive material value for shareholders Y
Slide 17: Guidance for 2019
Guidance for 2019 Operational guidance for 2019: • Yancoal attributable(1) saleable coal production of around 35Mt. • Yancoal attributable(1) cash cost (excl. Government royalties) of around A$62.50/t. • Expected attributable(1) capital expenditure of around A$285MM. Aim to balance long-term debt re
Slide 18: Prioritising Capital Returns and Asset Reinvestment
Prioritising Capital Returns and Asset Reinvestment Yancoal Capital Allocation Cycle – Prioritises Capital Returns and Asset Reinvestment Utilise operating cash Primary flow to: Operating pursuits • Reinvest in operations cashflow • Asset reinvestment • Reward shareholders • Shareholder returns thro
Slide 19: Appendices
Appendices Strength, Performance, Profit 19
Slide 20: Portfolio Overview
Portfolio Overview A diversified portfolio of world-class coal assets comprising interests in 9 mines with supporting rail and port infrastructure Yancoal’s Portfolio Asset Overview(1) Saleable Production Marketable Abbot Point South Location Ownership Reserves(3) Resources(4) (CY17)(5) (CY18) Bowen
Slide 21: Reserves and Resources By Mine
Reserves and Resources By Mine As at 31 December 2018, Yancoal has Coal Reserves of 1,763Mt, Marketable Coal Reserves of 1,265Mt and Coal Resources of 8,878Mt (on 100% basis) • On an attributable basis, Yancoal’s Coal Reserves were 1,240Mt, Marketable Coal Reserves were 891Mt and total Coal Resource